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If Asked to Comment About a New Tax on Cotton

Question 2

Multiple Choice

If asked to comment about a new tax on cotton collected from growers who do not grow their plants in the shade of other plants,an economist with no particular expertise in cotton growing might still note that


A) the price received by these cotton producers will fall by the full amount of the tax.
B) the price paid by consumers of this cotton will rise by the full amount of the tax.
C) the legal incidence of the tax does not determine who bears the burden of the tax.
D) the tax was imposed on the wrong party,it should have been placed on buyers.

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